I think in adding anything to the Distillery, one has to think about what it currently is, and what issues exist with it. Any project that is brought it, should address those issues in order to make it a successful community.
As it stands, we've got three large towers, and a few surrounding low-rise buildings - and from the time I've spent here, it seems as though most residents tend to live here, maybe utilize the restaurants from time to time, but generally get in their cars and spend most of their free time elsewhere.
Due to the unique nature of the area, the nature of the businesses here have to be one-of-a-kind, all in order to create a shopping/dining/tourist destination. And from what I understand, thats why the distillery has a rule about no chain stores.
But when you keep adding more and more residential, theres an increased demand for those drudge-tastic, boring, everyday services like dry cleaners that should not be in these old classic structures.
So naturally, it begs the question - will the retail in the ribbon be "no-chain"? Will the retail service the residents, or become high-priced boutiques that add to the one-of-a-kind-shopping destination that will bring in tourists? What's the point of bringing in residential density to an urban area, if you're going to keep them in their cars for daily errands? (trust me, I do not see neighbours here walking in droves over to No Frills/Loblaws/T&T or even St. Lawrence Market)
I say if anything, build the ribbon - chop the tower down to 10 storeys, and instead of residential - put in place the "Innovation Centre" that WaterfrontTO wants to drop in beside Sugar Beach. Anything left over in the buildings become retail, that we can all debate about at a later date.
The jobs that come from the centre would help the restaurants here stay flush throughout the year, and any of the parking being built under these buildings would arguably empty out in the evenings and weekends to accommodate the tourist traffic. Win, win.